Probe exposes flaws behind government’s health website rollout

July 31, 2014 12:00 AM

Jon Elswick

FILE - This March 1, 2014 file photo shows part of the website for HealthCare.gov, photographed in Washington. Management failures by the Obama administration set the stage for the computer woes that paralyzed the president's new health care program last fall, nonpartisan investigators said in testimony released Wednesday. After a months-long investigation, the Government Accountability Office found that the administration lacked "effective planning or oversight practices" for the development of HealthCare.gov, the online portal to coverage for millions of uninsured Americans. (AP Photo/Jon Elswick, File)

J. Scott Applewhite

FILE - This Nov. 5, 2013 file photo shows Medicare chief Marilyn Tavenner testifying on Capitol Hill in Washington. Management failures by the Obama administration set the stage for the computer woes that paralyzed the president's new health care program last fall, nonpartisan investigators said in testimony released Wednesday. After a months-long investigation, the Government Accountability Office found that the administration lacked "effective planning or oversight practices" for the development of HealthCare.gov, the online portal to coverage for millions of uninsured Americans. The report faults the Centers for Medicare and Medicaid Services — which is part of the Department of Health and Human Services — for ineffective oversight of contracts for HealthCare.gov's computerized sign-up system and its electronic back office. (AP Photo/J. Scott Applewhite, File)

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WASHINGTON — Management failures by the Obama administration set the stage for computer woes that paralyzed the president’s new health care program last fall, nonpartisan investigators said in a report released Wednesday.

While the administration was publicly assuring consumers that they would soon have seamless online access to health insurance, a chaotic procurement process was about to deliver a stumbling start.

After a months-long investigation, the Government Accountability Office found that the administration lacked “effective planning or oversight practices” for the development of HealthCare.gov, the portal for millions of uninsured Americans. As a result the government incurred “significant cost increases, schedule slips and delayed system functionality,” William Woods, a GAO contracting expert, said in testimony prepared for a hearing today by the House Energy and Commerce Committee. GAO is the nonpartisan investigative agency of Congress.

Spokesman Aaron Albright said the administration takes its responsibility for contract oversight seriously and has already started carrying out improvements that go beyond GAO’s recommendations. The congressional investigators recommended a cost-control plan and other changes to establish clear procedures and improve oversight. But Sen. Orrin Hatch, R-Utah, one of the lawmakers who requested the investigation, said “millions of taxpayer dollars were wasted to build a website that didn’t work, all because of bureaucratic incompetence.”

Investigators found that the administration kept changing the contractors’ marching orders for the HealthCare.gov website, creating mass confusion and adding tens of millions of dollars in costs. Changes were ordered seemingly willy-nilly, including 40 times when government officials did not have the initial authority to incur additional costs.

The report faults the federal Centers for Medicare and Medicaid Service for ineffective oversight. Known as CMS, the agency is part of the Department of Health and Human Services and was designated to administer Mr. Obama’s health care law.

GAO concluded:

• Contractors were not given a coherent plan, and instead jumped from issue to issue.

• The cost of a glitchy computerized sign-up system for consumers ballooned from $56 million to more than $209 million from September 2011 to February 2014. The cost of the electronic backroom for verifying applicants’ information jumped from $30 million to almost $85 million.

• CMS, representing the administration, failed to follow up on how well the contractors performed.

• A third contract, for fixes to the website, grew from $91 million in January to $175 million as of last month.

Two contractors initially took the lead building the system: Virginia-based CGI Federal built HealthCare.gov, the consumer-facing portal to subsidized private coverage for the uninsured. The site serves 36 states, while the remaining states built their own systems, with mixed results. QSSI, based in Maryland, was responsible for an electronic back office that helps verify personal and financial information to determine whether consumers are eligible for tax credits to help pay their premiums.

The consumer end of the system locked up on the day it was launched, Oct. 1, and was down most of that initial month. The electronic back office had fewer problems.

A few months before the launch, the CMS agency notified CGI that it was so dissatisfied that it would start withholding payments. Then it rescinded that decision. CMS ultimately paid nearly all of CGI’s $12.5 million in fees, withholding only $267,000, the report said. The agency later ended its contract with CGI. Another contractor, Accenture, was hired to make website fixes.

Confronted with a public relations disaster, the White House sent in a troubleshooter, management consultant Jeff Zients. He removed CMS as project leader, relegating it to a supporting role.

CMS administrator Marilyn Tavenner later personally apologized to Congress, saying, “The website has not worked as well as it should.”

Mr. Zients’ rescue operation got the site working by early December. Eventually, some 8 million people managed to sign up, far exceeding expectations.